Wall Street Gains on Better Signs in US-China Trade Talks

Wall Street stocks finished higher on Wednesday due to improved hopes for the US-China trade talks.

The Dow Jones Industrial Average added 0.6 percent at 24,527.27.

The broad-based S&P 500 advanced 0.5 percent to 2,651.07, while the tech-rich Nasdaq Composite Index jumped 1.0 percent to 7,098.31.

Wall Street stocks have been volatile in recent weeks in part due to unpredictable and ambiguous events connected to the Beijing-Washington trade negotiations.

The latest indicators have been more upbeat, with a Chinese Huawei executive granted bail in a Canadian court in a closely-watched legal case and confirmation from Commerce Secretary Wilbur Ross in a television interview that Beijing had offered to cut tariffs on autos imported from the United States and resume soybean purchases.

Unlike the last two sessions, there were no major gyrations lower on Wednesday. But stocks still finished well below their session highs, with the Dow falling about 300 points from its peak in the last three hours of trading.

Gainers included some equities that have been seen as vulnerable to a trade war with China. Boeing advanced 1.5 percent, Caterpillar 1.7 percent and Deere 0.8 percent.

Tech shares were also upward-bound, with Google parent Alphabet winning 1.1 percent, Amazon 1.2 percent and Netflix 3.6 percent.

Tencent Music, in its first session after going public, jumped 7.7 percent a day after the music streaming company raised $1.1 billion in an initial public offering.

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Sustainable Tree Farming Means Better Lives for Kenyan Farmers

Wood consumption — including logging and the production of charcoal — is a leading cause of forest degradation in Africa. In some of Kenya’s coastal regions, recurring droughts have made the problem even worse.  Now, farmers in those regions are planting trees, putting their once-barren land to use in a venture that enables them to earn a living and conserve the environment at the same time. 

At Be Sulubu Tezo, in Kilifi county, Kenya, Kanze Kahindi Mbogo tends to her tree farm. She thins out the trees whose wood is now strong enough for her to sell for home-building and making fences.  

The money she makes is for her six children. 

A better life

Kahindi says she has been able to educate her children, pay a couple of debts and do lots of other things. She adds she was also able to take one of her sons to college and right now he is a driver.

Before growing trees, putting food on the table was difficult in this land where droughts are common and crops often fail.

With the help of NGOs and entrepreneurs, farmers are learning how agroforestry can make them money and at the same time save the environment. One of those firms is Komaza, a Kenyan firm that is working with 14,000 farmers to plant drought-resistant trees for harvest, reducing the drive to deforest. 

Help with the harvest

“Farmers are able to nurture the seedlings into trees, and then the trees become fully grown trees ready to harvest,” said Allan Ongang’a, a manager at Komaza.  “Once they are ready for harvest we have the operations team from the forestry department that identify trees that are ready for harvest, agree with the farmers on a fair price, the trees are marked and harvested.”

The firm trains farmers on cultivation and selective harvesting.  

But not all farmers have the resources to plant a tree and wait for it to grow, so some farm subsistence crops among the trees.  Researchers say this arrangement counters the effects of climate change. 

Everybody benefits

“Trees end up absorbing carbon dioxide when they making their food and therefore essentially the trees are actually getting to bring carbon from the atmosphere into the tree stem and therefore on land,” explained researcher John Recha with the Climate Change Agriculture and Food Security Program, a private entity in Nairobi.. “That means there is the benefit of reducing greenhouse gas emission through more enhanced agroforestry systems.”

For these Kenyan farmers, environmentalism begins to make sense when it starts to translate into a sustainable income. 

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Malaysian Ex-PM Slapped with New Charge Over 1MDB Scandal

Former Malaysian Prime Minister Najib Razak was charged Wednesday with tampering with the final audit report into a defunct state investment fund, adding to a long list of corruption allegations against him since his ouster in May elections.

Najib was charged along with Arul Kanda Kandasamy, the former head of the 1MDB fund, which is being investigated in the U.S. and other countries for alleged cross-border embezzlement and money laundering.

Najib pleaded not guilty to abusing power to order the modification of the report in February 2016 before it was presented to the Public Accounts Committee, in order to protect himself from disciplinary and legal action. Kandasamy, who was detained overnight by anti-graft officials, pleaded not guilty to abetting Najib.

​The charges came after the auditor-general revealed last month that some details had been removed from the 1MDB report. Kandasamy led 1MDB from 2015 until he was terminated in June. The two men were released on bail, and face up to 20 years in prison if found guilty.

Najib set up 1MDB when he took power in 2009 to promote economic development, but the fund amassed billions in debts. U.S. investigators say Najib’s associates stole and laundered $4.5 billion from the fund, including some that landed in Najib’s bank account. 

Public anger over the scandal led to the defeat of Najib’s long-ruling coalition in May 9 elections and ushered in the first change of power since Malaysia gained independence from Britain in 1957.

The new government reopened the investigations stifled under Najib’s rule. Najib, his wife and several top-ranking former government officials have been charged with multiple counts of corruption, criminal breach of trust and money laundering. 

Najib, 65, has accused the new government of political vengeance.

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Avianca Brasil Airline Declares Bankruptcy

Cash-strapped Avianca Brasil, the country’s fourth-largest airline, on Tuesday sought bankruptcy protection from creditors but reassured passengers that flights will continue.

“Due to resistance from the lessors (of their aircraft) to reaching a friendly settlement, we have filed seeking protection from creditors, to protect clients and passengers,” a company statement said.

Operations are not expected to be affected and “passengers can have complete peace of mind to make reservations and buy tickets, since all sales will be honored and flights will be operating,” it said.

The airline has debts of almost 493 million reais ($127 million) with multiple creditors, the business daily Valor reported.

Avianca Brasil, a brand of Oceanair Linhas Aereas SA (Oceanair), is not part of the group Avianca Holdings S.A, based in Colombia.

But both are parts of a holding company led by the same investor, German Efromovich.

Brazilian media said the carrier is in debt to creditors including state oil giant Petrobras and Sao Paulo’s Guarulhos Airport.

Avianca Brasil serves domestic and international routes with 60 jets. The company is facing lawsuits for the return of 26 planes and 52 engines, Valor said.

The airline recorded net losses in the first half of the year of 175.6 million reais, up 24.4 percent from the same period last year.

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As Finances Improve, Greece Scraps Pension Cuts


Greece’s parliament on Tuesday voted to scrap plans to cut state pensions, in a motion led by the left-led governing coalition hoping to shore up its flagging support ahead of a general election next year.

Athens agreed two years ago to cut pensions in 2019, in an attempt to placate lenders and get the International Monetary Fund (IMF) to back a third financial bailout the country clinched with its euro zone partners in 2015.

Eventually the bailout, worth up to 86 billion euros, expired in August without IMF assistance, and Athens has said better-than-expected public finances enable it to rescind the planned cutbacks.

The European Commission has approved the government’s decision.

“The time has come for people to be rewarded for their sacrifices,” Prime Minister Alexis Tsipras told lawmakers ahead of the vote, calling the step a “necessary breath for the people of labor … who saw their pensions and their dignity hurt.”

Pensioners, who are in many households the only people with an income due to the highest unemployment rate in the eurozone, have seen earnings shrink by up to 40 percent since Greece toppled into crisis in late 2009.

Tsipras’ term ends in 2019. His Syriza party is trailing the conservative New Democracy by about 10 points in opinion polls.

Since 2010, Greece has signed up to three international bailouts totaling almost 290 billion euros, and will remain heavily indebted for years to come.

The country is monitored by its eurozone partners and the IMF to ensure it does not veer off post-bailout targets aimed at maintaining high budget surpluses in coming years.

New Democracy (ND) accused the government of increasing taxes and handing out benefits from budget revenues to win votes.

“You are wearing the mask of the philanthropist just to tip people from their own savings,” ND leader Kyriakos Mitsotakis told Tsipras in parliament.

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Big Drop Reported in Child Labor in Cambodia Fashion Factories 

While the United Nations says child labor has fallen sharply in Cambodia’s garment factories, many informal subcontractors using children are escaping scrutiny, activists said Tuesday. 

 

Better Factories Cambodia, a U.N. International Labor Organization and World Bank initiative, found just 10 cases of child labor, down from 74 in 2014, in its latest survey of almost 500 licensed garment export factories. 

 

However, campaigners said that children turned away from factory jobs may be working elsewhere, including homes where garments are produced by subcontractors. 

 

“There have been major strides in eliminating child labor” in factories, said William Conklin, Cambodia country director for the Solidarity Center, a U.S.-based nonprofit promoting workers’ rights. 

 

“But what it doesn’t address is the issue in the subcontract area. That is a big, unknown area in Cambodia.” 

 

Cambodia’s garment industry is the largest employer in the country. About 40 percent of its GDP comes from garment exports, and the sector employs more than 800,000 workers. 

 

Cambodian factories supply global brands including Gap, Sweden-based H&M, and sportswear brands Nike, Puma and Adidas. 

 

The ILO report noted that child labor usually involves workers under age 15 who have presented false identity documents to get factory jobs. 

Trapped in bonded labor

 

Tens of thousands of Cambodian families, including children, are trapped in bonded labor, forced to make bricks in return for kiln owners’ settling their debts, British researchers said in October. 

 

Child workers are often from families who have had to migrate because climate change has hit their harvests, said Dy The Hoya, a program officer with the Phnom Penh-based Center for Alliance of Labor and Human Rights. 

 

“I do not see any change in the informal sector,” he told the Thomson Reuters Foundation. 

 

Esther Germans, a program manager with ILO, said the organization has no data on subcontractors. 

 

“It is generally assumed that working conditions are worse and one can expect more incidences of child labor since there is less scrutiny,” she said in emailed comments. 

 

Companies are facing growing scrutiny to ensure their operations are slave-free as rising demand for cheap clothing fuels labor exploitation in factories worldwide. 

 

The government, which has come under fire for its human rights record, said in October that it would increase the monthly minimum wage in the textile sector to $182 in January from $170. 

 

H&M, which hosted a summit on fair wages in the fashion industry in the Phnom Penh on Tuesday, said wages in Cambodian factories producing its clothing were 24 percent higher than the minimum.

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Macron’s Concessions Set to Blow Out French Deficit

France will overshoot the European Union’s budget deficit ceiling next year without deeper spending cuts after President Emmanuel Macron caved in to anti-government protests.

Macron announced wage increases for the poorest workers and a tax cut for most pensioners on Monday in an effort to quell a near month-long public revolt.

But the measures will leave a 10 billion euro ($11 billion) hole in the Treasury’s finances, pushing France back over the EU deficit limit of 3 percent of national output and dealing a blow to Macron’s reformist credentials.

“We are preparing a fiscal boost for workers by accelerating tax cuts so that work pays,” Prime Minister Edouard Philippe told parliament. “That inevitably has consequences on the deficit.”

Philippe did not give details on the impact of the concessions on public finances or possible spending cuts, saying only that the government aimed to keep spending from increasing.

“Under all likelihood, the 2019 public deficit will print above the 3.0 percent benchmark,” Societe Generale economist Michel Martinez wrote in a research note.

Any failure to respect the EU deficit ceiling could shatter France’s fiscal credibility with its European partners after Paris flouted it for a decade before Macron took office. And any sign of leniency from Brussels could complicate the European Commission’s tense discussions with Italy about keeping its deficit down.

 

Italian Deputy Prime Minister Luigi Di Maio said Paris should be subject to the same treatment as Rome and now risked EU censure over its budget concessions.

“If the deficit/GDP rules are valid for Italy, then I expect them to be valid for Macron,” Di Maio said.

France’s 10-year borrowing costs climbed to their highest level compared with Germany in a year-and-a-half on Tuesday.

Europe’s Scope credit rating agency said it was unlikely Macron would be able to push through reforms of France’s costly pension and healthcare systems if he continued to lose public support.

Budget Minister Gerald Darmanin said Macron’s concessions would amount to 10 billion euros, including the cancelling of energy tax hikes announced last week.

Darmanin told senators the government now expected a budget deficit of 2.5 percent of GDP in 2019, excluding the one-off impact of a long-planned payroll tax rebate scheme becoming a permanent tax cut at a cost of 20 billion euros.

That compares with a previous 2019 deficit/GDP forecast of 1.9 percent without one-offs, or 2.8 percent overall. The new, higher underlying deficit thus implies pushing the overall number towards 3.4 percent next year without measures to rein in spending.

Moreover, the “yellow vest” protests are slowing economic growth. Two opinion polls on Tuesday showed roughly one in two French people think they should now end their protests.

An Elysee official said on Monday France had some wiggle room on spending if the tax rebate was not taken into account.

The European Union’s executive arm is to make a final assessment of France’s 2019 budget in the second quarter of next year when it releases new economic forecasts, a spokesman said.

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Disney Again Makes History with Earning Above $7B for 2018

Walt Disney Studios is again ending the year on a high note, posting more than $7 billion in global box office earnings, thanks to hits such as “Black Panther” and “Avengers: Infinity War.”

“This is only the second time in history any studio has surpassed the $7 billion mark, after Disney’s own industry-record 2016 global gross of $7.6 billion,” the company said in a statement on Monday.

“The Studios’ estimated international box office gross through December 9 is an estimated $4.069 billion, marking our second biggest year and the third biggest in industry history,” it added.

Disney’s success comes as the studio is set to release “Mary Poppins Returns” on December 19, which is expected to top the box office during the holiday season.

​”To date, four of the top eight worldwide releases of the year are from The Walt Disney Studios, including the top two global and top three domestic releases,” the company said.

“Avengers: Infinity War,” made by Disney’s Marvel subsidiary, led the way, earning $2 billion alone. It is followed by superhero movie “Black Panther,” which earned $1.35 billion worldwide.

“Incredibles 2,” made by Pixar, another Disney subsidiary, earned $1.24 billion.

Other top box office earners for 2018 are “Ant-Man and The Wasp,” “Solo: A Star Wars Story,” and “Ralph Breaks the Internet,” which has held the number one spot at the North American box office for the third consecutive week.

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